aerospace

Bombardier CEO admits ‘bad job’ communicating pay increases

Bombardier did “a bad job” explaining its decision to raise executive compensation, but the company has listened to the public and is now ready to turn the page, CEO Alain Bellemare says.

October 13, 2016

In an interview, Bellemare acknowledged that Bombardier (TSX:BBD.B) underestimated the anger that would erupt over the pay hikes, which were to come as it was issuing pink slips to thousands of employees while receiving federal and provincial assistance.

“It’s all on us at Bombardier,” he said. “The message here is we did listen, we paid attention, we care.”

Bellemare announced late Sunday that he has asked Bombardier’s board of directors to delay the payment of more than half of this year’s total planned compensation for six executive officers, including himself, by one year — until 2020. The compensation would be paid as long as certain objectives that haven’t changed are met by that time.

The remuneration is required to attract top talent to turn around the company’s fortunes, which in turn benefits employees and shareholders alike, he said.

Last week, the company issued a proxy circular showing that Bellemare and five others were in line for a nearly 50 per cent increase in compensation, most of which was to be granted in 2019. The disclosure stoked fierce outcry that lasted for days, including a weekend protest at Bombardier’s headquarters in Montreal.

Federal Economic Development Minister Navdeep Bains said Monday that like many Canadians, he was disappointed by the Bombardier executive pay raises, but it seems like the company is trying to address those concerns.

“Clearly there’s a recognition that they need to make changes, that they need to approach this differently,” Bains said, striking a different message from the one offered by the prime minister last week.

Asked how he can justify the $372.5-million federal loan for Bombardier’s CSeries and Global 7000 aircraft programs, Justin Trudeau said his government respects “the free market and the choices that companies will make.” (Source: CTV news)

The federal government investing in aerospace giant Bombardier is not a matter of if but how, Innovation Minister Navdeep Bains said Tuesday.

“We want to be a partner,” Bains said after announcing up to $54 million in funds for a Bombardier-led aerospace-research consortium.

“We want to find a solution and we want to continue to make meaningful investments. We want to be a partner, we are at the table, we want to find a solution. It’s not a matter of if but how we want to make the investment.”

His comments are the clearest the Liberals have been to date regarding whether they’ll accept the Montreal-based company’s request for $1 billion in federal funding.

In early September, Bombardier (TSX:BBD.B) received the second of two instalments of US$500 million from the Quebec government.

Quebec now owns 49.5 per cent of a new limited partnership of the CSeries aircraft program, including larger versions of the plane beyond the CS100 and CS300 should they be developed.

Bains wouldn’t give details as to exactly how much Ottawa will invest or where the money will be targeted.

He did reiterate the conditions his government will place on any future funding.

Ottawa wants Bombardier to keep its head office and the jobs connected to its research and development activities in the country, he said. (Source: Financial Post)